Iran has finally come out with a response to the Obama offer concerning their enriched uranium supplies. While the details are important of course, what is also important is the timing of the response, two days AFTER Obama's self-imposed 'deadline'. Nothing says "I don't care what you think" like waiting 48 hours after someone's deadline to make a response, and indeed, an ultimatum.
Iran must be feeling fairly self-confident to tweak Obama's nose in this way, which leads me to suspect that either Russia or China (or both) have given them some moral support encouraging them to do this. The reasoning for Russia and/or China is simple, undermine Obama and the USA by deliberately breaking their deadline and then make an unacceptable counter-offer that is barely sufficient for Russia and China to be able to wave around as a 'viable' dialogue. It would force the USA to either back down or come hat in hand to China and Russia to beg for diplomatic support, which they won't provide. The final alternative, military action, has all but been written off.
All in all, the USA comes out appearing to be a paper tiger, all bark and no bite.
The alternative floated in the article that Iran is looking to provoke a crisis to shore up domestic support seems possible but if we follow that logic then the 'best' response the USA can make is to back down completely and welcome Iran to the nuclear club.
Fundamentally, there is no reason for Iran to enrich its uranium up to 20%. At that enrichment level it is useless for power generation and could only be used (after further enrichment) in either a research reactor (but Iran can't fabricate the fuel bundles required) or for nuclear weapons. If Iran begins enrichment to that level it would be a clear sign that they intend to fabricate a nuclear weapon. It would also, likely be far too late in the game to do anything but watch.